SAN DIEGO — President Joe Biden is calling on the Federal Trade Commission to investigate why gas prices continue to go up across the nation.
The average price of a gallon of regular gas in San Diego County was $4.648 Thursday, the ninth straight day of increases. It’s less than 8 cents from the record $4.725 San Diegans were paying on Oct. 8, 2012.
In a letter addressed to FTC Chairwoman Lina Khan, Biden said, “I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct. … I therefore ask that the commission further examine what is happening with oil and gas markets.”
Biden said oil and gas companies in the U.S. are generating significant profits from the higher cost of energy, noting that two of the largest oil and gas companies in the U.S. are on track to nearly double their net income over 2019.
The American Petroleum Institute responded to Biden’s call for an investigation saying, “Rather than launching investigations on markets that are regulated and closely monitored on a daily basis or pleading with OPEC to increase supply, we should be encouraging the safe and responsible development of American-made oil and natural gas.”
Joe Silverman, an economics professor at San Diego State University, said for the FTC to find collusion, investigators would need to find that big oil and gas companies communicated to fix gas prices.
“There have been half a dozen investigations or more going back to the 1970s, and they’ve never found any collusion among the oil companies,” Silverman said.
He thinks the investigation is political with many Americans upset with inflation increasing the cost of food and gas.
“It’s harder on lower-income and working-class families, and let’s be honest, the Democratic party used to be the party of the working class. White, working-class people have gravitated towards the Republicans in recent years, and Biden wants to get those people back,” Silverman said.
Alan Gin with the Economic Research Center at the University of San Diego said gas prices are soaring because of demand and not enough supply.
“When we had the pandemic, OPEC cut back its production a lot. And now that we are coming out of it, OPEC is increasing its pricing, but they are not at the same levels they were,” Gin said. “A bit of a production problem from OPEC and now you add just a big increase in the demand for gasoline and for oil.”
Gin said it’s tough to say when the price will go down since the U.S. relies on other world oil producers.
“We don’t know what OPEC and Russia are going to do in the future. Are they going to continue with this tight supply as far as oil is concerned? Or are they going now to increase production to help the world economy? Also maybe to take advantage of these high prices,” Gin said.